Motilal Oswal: AU Small Finance Bank’s Moratorium Book Dips In Q1; Treasury Gains, Opex Support Earnings   
A man holds two thousand and five hundred Indian rupee banknotes in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Motilal Oswal: AU Small Finance Bank’s Moratorium Book Dips In Q1; Treasury Gains, Opex Support Earnings   

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

AU Small Finance Bank Ltd.’s Q1 FY21 earnings were strong, led by higher treasury gains (including the Aavas stake sale) and sharp decline in opex.

The bank prudently utilized gains to create higher provisions (Rs 1.4 billion), thus taking the total Covid-19 related provisions to Rs 2.8 billion. Overdue loans declined to Rs 11.3 billion (4.3% of loans) while complete moratorium book decreased to 11% (versus 25% as at April 2020).

On the business front, while loan growth moderated, margins saw steep decline of approximately 50 basis point, impacted by excess liquidity.

Click on the attachment to read the full report:

Motilal Oswal-AU Small Finance Bank Q1FY21 Result Review.pdf

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